The Future of Human Potential

THE FUTURE OF HUMAN POTENTIAL

IN A NUTSHELL

• Fasten your seatbelts! HUMAN POTENTIAL is in for a ride

• The next TWO DECADES will bring unprecedented economic opportunities

• Soon, EVERY COMPANY will be a ‘technology company’

• ENTREPRENEURS are leading the knowledge storm

HUMAN POTENTIAL IS IN FOR A RIDE

WHERE DO WE GO FROM HERE?Humancapitalisthestockofknowledge,habits,socialandpersonalityattributes,includingcreativity,embodiedintheabilitytoperformlaborsoastoproduceeconomicvalue.

Source:TheAIRevolution:RoadtoSuperintelligence -WaitButWhy

THIS IS THE REAL “J” CURVEWeareontheedgeofchangecomparabletotheriseofhumanlifeonEarth.— Vernor Vinge


LAW OF ACCELERATING RETURNS

Source:TheLawofAcceleratingReturns

Itstatesthat"fundamentalmeasuresofinformationtechnologyfollowpredictableandexponentialtrajectories."

AI IS AROUND THE CORNER

Caliber1)ArtificialNarrowIntelligence(ANI):specializesinonearea:chess

Caliber2)ArtificialGeneralIntelligence(AGI):acomputerthatisassmartasahumanacrosstheboard—amachinethatcanperformanyintellectualtaskthatahumanbeingcan

Caliber3)ArtificialSuperIntelligence(ASI):anintellectthatismuchsmarterthanthebesthumanbrainsinpracticallyeveryfield,includingscientificcreativity,generalwisdomandsocialskills.

First,stopthinkingofrobots.Arobot isacontainerforAI,sometimesmimickingthehumanform,sometimesnot—but theAIitselfisthecomputerinsidetherobot(i.e.software).


RUNNING WITH THE MACHINEInasmartprocess,peopleareaninherentanddesiredpartoftheprocessoractivity.Theendgoalistomakepeoplemoreeffectiveandproductive

A HISTORICAL PERSPECTIVE

FIVE TECHNOLOGICAL ERAS IN LAST 250 YEARS

IndustrialRevolution

1771

SteamandRailways1829

SteelandElectricity1875

Oil&Automobile

1908

InformationTechnology

1971

Britain BritainContinentandUS

US&GermanyBritain

USGermany

USEurope&Asia

Eachgeneratedanimportantall-pervasivelowcostinput:asourceofenergy,oracrucialmaterial,ortransportation,orcommunication

Arkwright’s Mill opens in Cromford

Test of the “Rocket” steam engine for the

Liverpool-Manchester

Railway

The Carnegie Bessemer plan

opens in Pittsburg

First Model T comes out of Ford’s plan in

Detroit

The Intel microprocessor is

announced in Santa Clara

Source:CarlotaPérez– TechnologicalRevolutionsandFinancialCapital

PATTER OF DIFFUSION

Clusterofnewproducts,

industriesandinfrastructure

Newgenerictechnologiesandmanagementprinciples

Higherlevelofpotential

productivityforthewholesystem

Increasedconsumersurplus

andhumandevelopment


FIVE CONSTELLATIONS OF INFRASTRUCTURESEachresultsfromthesynergisticinterdependenceofagroupofindustrieswithoneormoreinfrastructuralnetworks


1771



Oil&Automobile

1908


1971

Canals and waterways

Turnpike roadsWater power

RailwaysPostal service

TelegraphPorts

Electrical networksTelephone

Global shipping, telegraph

Oil ductsMulti-modal

transportationnetworks

Global telecomInternetServers

Mechanized cotton

Wrought ironMachinery

Steam engineMining

Rolling stock

Heavy chemistryElectrical equipment

Canned and bottled food

AutomobilesPetrochemicals

Home appliancesRefrigerated

foods

ComputersSoftwareControls

instruments

Industrie

sInfrastructure


FIVE ECONOMIC PARADIGM SHIFTS'Eachunleashedaprofoundtransformationin‘thewayofdoingthings’acrossthewholeeconomy

Resultinginabest-practicemodelmadeupofasetofall-pervasivetechnologicalandorganizationalprinciples,thusanewwayof‘management’


1771



Oil&Automobile

1908


1971

MechanizationProductivity/time

keepingFluidity of movement

Economies of agglomerationEconomies of

scaleStandard parts

Vertical integration

CartelsCost accounting

Mass productionStandardization

of productsFunctional

specialization

SegmentationEconomies of

scopeGlobalization


FINANCIAL INNOVATIONCapitalalsoflowsinwaves:1.Riskcapital,2.Growth,3.Riskspreading,4.Refinancing


1771



Oil&Automobile

1908


1971

1. Nabobs2. State financing3. Local banks4. State financing

1. Families2. Local banks financing3. Joint-stock companies4. State foreign direct investments

1. Fellow capitalist2. Investment banks3. Regional banks financing4. National banks financing

1. Banks2. Stock market3. Bond market4. Private foreign direct investments

1. Venture Capital2. Private Equity3. Crowd funding4. ?


TWO DECADES OF UNPRECEDENTED OPPORTUNITIES

THE PROPAGATION OF PARADIGMS


THE ORIGINS: WORLD WAR II

• Office of Scientific Research and Development (OSRD)

– 10,000 scientists

– US$5.5 billion to universities: MIT, Caltech, Harvard, Columbia, Stanford

– US$25 billion on Manhattan project alone

– Several other US$ billion projects

– Developments: radar, electronic warfare, rockets, sonar, proximity fuse, napalm, bazooka, penicillin and cures for malaria, the atomic bomb

Source:SteveBlank,SecretHistoryofSiliconValley

MainframeComputing

1960

MiniComputing

1970

PersonalComputing

1980

DesktopComputing

1990

MobileComputing

2000

1MM+units

10MM+units

100MM+units

1B+units

10B?units

Source: Morgan Stanley, IBM, Nokia

THE IT ERA IS ABOUT HALF WAY THERECycleswiththeEralastabout10years.Newcompaniesoftenwinbiginnewcycles.Newcycleoftencreatemoremarketcapitalizationthanpriorcycles.

IBMNCR

Control DataHoneywell

Digital EquipmentDataGeneral

HPPrime

MicrosoftCiscoIntelAppleOracleDell

GoogleAOLeBay

TencentRakuten

AppleGoogle

Samsung

WE ARE HITTING MIDDLE AGEThecomputerindustry isinastageakintotheautosectorinthelate50’s

Source:Asymco

THE PHASES OF EACH SURGE OF DEVELOPMENTThebest20yearsarejustaheadofus!


EVERY COMPANY WILL BE A ‘TECHNOLOGY COMPANY’

THE INSTALLATION PERIOD OF THE IT ERA

InfrastructureTelecommunications

PlatformsSoftware&Services

AggregatorsContent&Applications

CommerceRetail

Likeinpreviouseras,aclusterofnewproducts,industriesandinfrastructurelaythegroundworkfordissemination.

THE DEPLOYMENT PERIOD OF THE IT ERA

Source:Kleiner PerkinsInternetTrends

DIGITAL DISRUPTION BY INDUSTRY

Source:Cisco– WhereDisruptionandInnovationRules

RE-IMAGINING OUR LIFE

Source: CBInsights

RE-IMAGINING OUR HOME

Source: CBInsights

RE-IMAGINING CPG

Source: CBInsights

RE-IMAGINING BANKING

Source: CBInsights

RE-IMAGINING TRANSPORTATION

Source: CBInsights

RE-IMAGINING HOTELS

Source: CBInsights

SOON, ALL COMPANIES WILL BE TECH Life is already digital and software is eating the world.

10X change onhow we produce

10X change onwhat products are

10X change onhow we buy and consume

ENTREPRENEURS ARE LEADING THE KNOWLEDGE STORM

THE IT ERA ORGANIZATIONAL LEGACY

• Customer Development • Growth Hacking• Halocracy• Crowdsourcing• Technology Product Management• Agile Development• Design Thinking

LEVERAGING EXISTING KNOWLEDGE

CONNECTING KNOWLEDGE

THIS IS WHY HUMAN POTENTIAL WILL TAKEOFFSoftwareisbecominganenvironmentwhereworkflow,education,andbestpracticesarebroughtforwardtohelphumansperformbetter.

KEY DRIVERS OF HUMAN DEVELOPMENT

Source: The History of Creating Value

Startupfoundersareacceleratingthepace,bymakingusefulthingsfasterthancorporations.

IN SUMMARY

• HUMAN POTENTIAL is being leveraged by software

• We have TWO DECADES of strong potential ahead of us

• EVERY COMPANY should be working on its ‘technology’ path

• FOUNDERS and it’s management ideas are the greatest products of our era

www.astellainvest.com

The Future of Human Potential

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